Japan, U.S. say made significant trade progress before summit

By Kaori Kaneko

TOKYO (Reuters) - The United States and Japan made significant progress in trade talks over the past days, adding momentum to multilateral efforts toward a free-trade pact, both sides said on Tuesday.

"Through these efforts, the gaps between the two sides have been substantially narrowed," U.S. Trade Representative Michael Froman said after two days of talks with Economy Minister Akira Amari. "But continued work is needed to ultimately resolve the outstanding issues."

Amari told reporters the long-running bilateral talks had made enough progress to be welcomed at a summit on April 28 between Prime Minister Shinzo Abe and President Barack Obama -- the goal he had declared for the ministerial talks.

"The negotiations are at the final stage," Amari said. "We will continue to make utmost efforts toward an early agreement, maximising our national interests."

Progress in the talks begun at the working level last week adds momentum to multilateral efforts toward a free-trade pact, Froman said. A bilateral deal is considered vital to a long-delayed deal in the Trans-Pacific Partnership (TPP) trade pact, as their economies account for 80 percent of the 12-nation group.

The ministers instructed their officials to work on the remaining issues of access to the Japanese rice market and the U.S. car market, Amari said. He and Froman could meet again if necessary.

Abe, speaking on a news programme late on Monday, said the discussion had narrowed to a few, lingering items.

Abe likened the talks to mountain climbing, saying there was "one, tough stretch" to complete. "We would like to redouble our efforts so that a deal can be reached," he said.

Amari on Sunday said Japan would not accept a U.S. demand to substantially expand its rice imports, while pressing Washington to further open the U.S. car-parts market.

Japan is set to allow a special quota of about 100,000 tonnes a year for rice imports from its 11 TPP partners, the bulk of which is expected to come from the United States, the Nikkei business daily said. The United States is demanding roughly double the size of quota, the Nikkei said.

Japan has sought immediate abolition of a 2.5 percent tariff on U.S. imports of auto parts, but Washington, under pressure from the politically powerful auto industry, wants to maintain auto-related tariffs as long as possible, the newspaper said.

Prospects for the bilateral deal improved on Thursday, when senior U.S. lawmakers agreed on the wording of a bill to give Congress a yes-or-no vote on TPP but not the power to alter a deal. However, passage of the "fast track" bill, which Japan says is essential, remains far from assured.

Washington and Tokyo see strategic as well as economic value to a broad TPP deal as a counterweight to rising China, which has not joined the group.

(Additional reporting by Tetsushi Kajimoto, Kiyoshi Takenaka and Linda Sieg; Editing by William Mallard and Janet Lawrence)